Revenge of the Kurds

As ISIS rolls toward Baghdad, the Kurds are gaining oil, ground, and power.

Amid the rubble left in Iraq by the rampage of Islamist insurgents, one group seems poised to benefit: the Kurds. Baghdad's flailing response to the offensive launched by the Islamic State of Iraq and al-Sham opens the door to greater geographical reach for the Kurdish region, greater leverage over the central government, and a stronger possibility of becoming a big energy exporter in its own right.

The Islamist insurgents, known variously as ISIS and ISIL, continued their drive south toward the Iraqi capital on Thursday after having captured key northern cities, including Mosul. No less vigorous has been the Kurdish response: In sharp contrast to the Iraqi military forces, which evaporated despite outnumbering ISIS fighters, Kurdish military forces on Thursday took Kirkuk, an important city straddling the Arab and Kurdish parts of Iraq and the centerpiece of the northern oil industry. The Kurdish occupation, in a matter of hours, of a city that has been a bone of contention between Arabs and Kurds for centuries -- and especially during Saddam Hussein's rule of Iraq -- underscores how dramatically the ISIS offensive is redrawing the map of Iraq.

"This may be the end of Iraq as it was. The chances that Iraq can return to the centralized state that [Prime Minister Nouri] al-Maliki was trying to restore are minimal at this point," said Marina Ottaway, a Middle East specialist at the Wilson Center.

The contrast between robust security in Kurdish-ruled parts of the country and the security vacuum left by fleeing Iraqi troops could ultimately roll back decades of Iraqi history and put Kurdish leaders in Erbil in the catbird seat, especially when it comes to a contentious tug of war over energy resources.

"The strategic failure of Iraqi forces has really shifted the entire balance of power between the Kurdish Regional Government and Baghdad," said Ayham Kamel, Middle East director at the Eurasia Group, a risk consultancy. "It really allows the KRG to negotiate with Baghdad on entirely different terms" when it comes to a fight over the Kurds' right to export oil directly.

For years, Kurds in northern Iraq sought to benefit more from the region's abundant oil and gas resources, but energy exports were centralized in Baghdad, with export revenues shared among Iraq's regions. Kurdish leaders argued that the deal shortchanged them because they never got the 17 percent of revenues they were promised.

As a result, the Kurds decided -- in the face of a barrage of threats and intimidation from Baghdad -- to build their own energy-export infrastructure, enabling them to transport oil directly to nearby Turkey. That pipeline opened this year and energy firms operating in the region say that it will be fully operational later this year. Getting the export pipeline up to cruising speed is important for the Kurdish government. It needs to export about 450,000 barrels of oil a day to earn what it received from the central government. By the end of next year, the KRG hopes to be exporting as many as 1 million barrels a day.

But just recently, Baghdad seemed capable of crushing Kurdish energy dreams. Only hours before the ISIS offensive began, Iraqi officials were vowing to take the dispute to the United Nations. The legal uncertainties surrounding Kurdish oil kept it from flowing easily to new buyers. For example, a pair of tankers loaded with Kurdish crude wandered around in search of a port in May and June. U.S. officials long sought to push Erbil and Baghdad into an agreement over how to divvy up the nation's energy wealth and tried to discourage the Kurdish government's go-it-alone stance.

All that looks like history now. Turkey, the main market for Kurdish oil, is both eager to lock up new sources of energy and to promote some pocket of stability on a troubled frontier. Given that ISIS rebels, for now, have not launched any attacks inside Kurdish-ruled areas is a comfort to officials in both Erbil and Ankara.

"Economics is totally on the side of independent Kurdish exports. And politics is shifting as well," said Ottaway. "Things are definitely going in the right direction for Kurdistan, as long as ISIS leaves them alone."

Kurdish officials hope the contrast between the ineffective and often sectarian Iraqi forces and Kurdish-governed areas' relative security and stability will enhance the region's appeal and boost export potential.

"The events in Iraq have proven to the international community who can be reliable and competent partners, and a source of energy," said Karwan Zebari, the director of the Kurdish Regional Government's representation in Washington, D.C. He said the KRG is committed to a unified Iraq and doesn't seek independence.

The Kurdish occupation of Kirkuk, to forestall an attack by ISIS in the absence of any Iraqi military units, could further shift both the political dynamics inside Iraq and change the shape of the country's energy sector. That's because, given Baghdad's other pressing priorities, it may well prove difficult for the central government to reassert control there.

"They're capitalizing on a moment of weakness to create facts on the ground," said Kristian Coates Ulrichsen, a Middle East specialist at Rice University's Baker Institute. He said the fluid situation could revive the decade-old idea of partitioning Iraq into separate ethnic and political spheres. "This carve-up may just happen on the ground, as different groups take advantage of the vacuum of authority."

Kurdish control over Kirkuk, and the massive oil fields found nearby, could have a ripple effect on the rest of Iraq's oil industry, Eurasia Group's Kamel said. That is, the Kurdish-style oil contracts, which offer foreign firms a share of the oil, could displace the less attractive Iraqi-style contracts at those mammoth fields.

"The KRG could actually push its interests and dictate terms for future contracts at the Kirkuk field; it wouldn't just be the central government dealing with that," he said.

Whether the Kurds come out stronger from Iraq's harrowing battle against extremists depends on how well they insulate themselves from violence and instability.

"The question now is whether Kurdistan can remain an oasis of stability despite the turmoil around it. If it does, its oil future is huge -- it now controls Kirkuk and its fields and oil exports could increase immediately," said the Wilson Center's Ottaway.

Marwan Ibrahim - AFP - Getty


Jihadist Gains in Iraq Blindside American Spies

First Crimea, now Iraq. Why does America's $50 billion intelligence community keep getting taken by surprise?

United States intelligence agencies were caught by surprise when fighters from the Islamic State of Iraq and al-Sham (ISIS) seized two major Iraqi cities this week and sent Iraqi defense forces fleeing, current and former U.S. officials said Thursday. With U.S. troops long gone from the country, Washington didn't have the spies on the ground or the surveillance gear in the skies necessary to predict when and where the jihadist group would strike.

The speed and ease with which well-armed and highly trained ISIS fighters took over Mosul, Iraq's second-largest city, and Tikrit, the birthplace of former Iraqi ruler Saddam Hussein, have raised significant doubts about the ability of American intelligence agencies to know when ISIS might strike next, a troubling sign as the Islamist group advances steadily closer to Baghdad. And it harkened back to another recent intelligence miscue, in February, when U.S. spy agencies failed to predict the Russian invasion of Crimea. Both events are likely to raise questions about whether the tens of billions of dollars spent every year on monitoring the world's hot spots is paying off -- and what else the spies might be missing.

The CIA maintains a presence at the U.S. Embassy in Baghdad, but the agency has largely stopped running networks of spies inside the country since U.S. forces left Iraq in December 2011, current and former U.S. officials said. That's in part because the military's secretive Joint Special Operations Command had actually taken the lead on hunting down Iraq's militants. With the JSOC commandos gone, the intelligence agencies have been forced to try to track groups like ISIS through satellite imagery and communications intercepts -- methods that have proven practically useless because the militants relay messages using human couriers, rather than phone and email conversations, and move around in such small groups that they easily blend into the civilian population.

Policymakers in Washington and other allied capitals were similarly unsure of the group's true strength or how to respond. In late May, Secretary of Defense Chuck Hagel met with defense officials from Arab countries in Jeddah, Saudi Arabia, where they agreed that ISIS and other Islamic fighters in Syria and Iraq posed a threat to the entire region, a senior U.S. official said. But no plan on how to counter those groups emerged from the meeting, and there's no indication that U.S. intelligence agencies stepped up monitoring of ISIS fighters in Iraq, who also seized control of Fallujah and parts of Ramadi in January.

"We got caught flat-footed. Period," said Daveed Gartenstein-Ross, a terrorism analyst and senior fellow at the Foundation for Defense of Democracies, who studies ISIS and other al Qaeda-linked groups. Although for the past three years U.S. officials had assessed that ISIS was strong enough "to go toe-to-toe" with the Iraqi military -- a fact the group demonstrated with its operations in Fallujah and Ramadi -- there has been no indication that the U.S. intelligence agencies knew ISIS was about to mount a major offensive to take over two more cities simultaneously, Gartenstein-Ross said.

In the wake of this week's attacks on Mosul and Tikrit, U.S. intelligence agencies have increased the number of high-resolution images taken from satellites, which could help find the location of ISIS forces on the ground, a U.S. official said. But it was unclear whether this information is being provided to Iraqi forces to help them plan airstrikes or other operations.

Two senior U.S. officials acknowledged that the intelligence agencies' assessment of ISIS has been overly broad and lacked the type of specifics that could have actually helped the Iraqi military know when and where to expect an attack. But the greater concern to the Obama administration has been the strength of the Iraqi forces and their actual will to fight, they said.

"This has never been about whether we thought ISIS had the capability to launch attacks. It's always been, do the Iraqis have the capability to defend their country?" one official said. On that score, the U.S. assessment was more on the mark. Obama administration officials have hesitated to provide Iraqi military forces with advanced weapons -- including fighter jets and attack helicopters -- because they've never shown an aptitude for using them or sufficient resolve to fight their enemies, the officials said. The Obama administration had also long feared that Iraqi Prime Minister Nouri al-Maliki, a Shiite with clear antipathy towards the country's Sunni population, would use the armaments against his own people.

The intelligence agencies' inability to predict the latest crisis in Iraq is likely to fuel critics of the Obama administration's management of other global crises, including in Syria and Ukraine. In the case of Russia's seizure of Crimea, in which U.S. spies were also caught by surprise, sophisticated electronic eavesdropping systems run by the National Security Agency were of little use because Russian forces limited their time on telephones and adopted the techniques of jihadists, sending couriers back and forth between their units.

A senior U.S. intelligence official said that analysts had "closely tracked" ISIS and its predecssor organizations for years and, contrary to crticisms, understood that the group was a serious threat. "During the past year, [analysts] routinely provided strategic warning of ISIL’s growing strength in Iraq and increasing threat to Iraq’s stability," the official said, using an alternate acronym for the group. "They also warned about the increasing difficulties Iraq’s security forces faced in combatting ISIL, and the political strains that were contributing to Iraq’s declining stability." Analysts also reported that the group was exploiting political rifts between the ruling Shiite government and the Sunni minority, and that it had taken advantage of the war in neighboring Syria "to strengthen its operational capacity and intensify the threat to the Iraqi Government," the official said. And analysts warned that ISIS was gaining a foothold in Mosul and deepening its influence there as it expressed a "keen interest in targeting Baghdad," the official said.

(The official also said that prior to the Russian invasion of Crimea, the "[intelligence community] warned that that the region was a flashpoint for a possible military conflict and that the Russians were preparing military assets for possible deployment to Ukraine.  Intelligence analysts underscored that such operations could be executed with little additional warning.")

But the responsibility for failing to counter ISIS in Iraq cannot solely be placed at the feet of U.S. intelligence agencies. When American forces were stationed in the country, they built one of the most successful battlefield intelligence systems in the history of American warfare. The NSA monitored every phone call, email, or text message in Iraq, and it provided leads on the location of jihadists and insurgents to drone pilots and special operations forces, who captured or killed them. U.S. commandos working hand in hand with the CIA also developed an extensive network of human spies.

But when U.S. forces left Iraq in 2011, all that intelligence power went with them. The Iraqi government failed to secure an agreement that would have allowed the United States to maintain some physical presence in Iraq, which it needed to run the intelligence networks at full throttle. Today, that intelligence capability has withered.

"The United States has so many intelligence collection efforts occurring simultaneously. It's especially difficult to collect in a place where we have no presence," said Christopher Harmer, a former Navy officer and an analyst with the Institute for the Study of War. Given the lack of human spies in particular, Harmer said that the United States would be outmatched in Iraq against ISIS because of its reliance on couriers and the diligence with which it avoids phones and email, which can be tracked. "What ISIS is best at is exactly what we are worst at. We just don't have a good human intelligence network" in Iraq, Harmer said.

If the United States has any hopes of gaining some intelligence insights into Iraq, it might look to the autonomous Kurdish region in the north. "The Kurds begged the U.S. to keep a base in Kurdistan" prior to the troop withdrawal, said David Tafuri, who served as the Rule of Law Coordinator for Iraq with the State Department in 2006 and 2007, and is now a partner with the law firm Squire Patton Boggs. "They would have given the U.S. whatever it wanted to have a base here. And if we did, we'd be in a much better position to monitor this situation," Tafuri said.

Iraqi officials have been eager to get their hands on U.S. military and intelligence equipment to assist in their struggle against jihadists. On May 8, Foreign Policy reported that the Iraqi government was actively seeking armed aerial drones from the United States to combat al Qaeda militants in the increasingly violent Anbar province, where fighters from Syria were believed to be spilling over into Iraq. And in a significant reversal, Iraqi officials said they would welcome American military drone operators back into the country to target the militants on its behalf, according to people with knowledge of the matter. But to date, the United States has only agreed to give Iraq 10 small ScanEagle drones, which are launched from a catapult and carry no weapons. Those should arrive by the end of the summer, the White House said Thursday.

Iran, the United States' most nettlesome adversary in the entire region, is moving much faster. According to press reports, a 150-man unit of the Quds Force, the elite wing of Iran's Revolutionary Guard, had been sent to Iraq to bolster the Maliki government and fight ISIS. Other accounts suggest that a joint Iranian-Iraqi force has retaken all or most of Tikrit.

"We have seen reports but we cannot confirm them," White House Press Secretary Jay Carney said Thursday. Asked by a reporter whether the Obama administration would caution Iraq not to seek assistance from its neighbor, Carney said, "I think that this is an issue of the government of Iraq, and our view is they ought to make prudent decisions about how they deal with the [ISIS] threat in the interests of national unity."

This article has been updated to include comments from a senior U.S. intelligence official about analysts' reporting on ISIS prior to its attacks on Mosul and Tikrit.